"We're trying to avoid layoffs, it's very difficult for us, it's very difficult for employees, it reduces services," Reed said.

To save jobs, the city has asked its nearly 7,000 employees to agree to a true-zero wage freeze. Several unions have done so, but others accuse the city of not being flexible in how it wants to save an estimated $12 million.

"The problem is not meeting that number, it's meeting that number in a way the that city will accept the money and the city will only accept the money stacked in fives, tens, wrapped in a red ribbon," South Bay Labor Council spokesperson Jody Meacham said.

After five months of failed negotiations with one union, the City Council voted Tuesday to force some term some Operating Engineers Local 3; the unprecedented action passed with a 7-3 vote. The unions say a vote against one is a vote against all.

"It's rapidly becoming an 'us versus them', which we know is going to be a very unproductive environment," San Jose Firefighters Union President Randy Sekany said.

The San Jose City Council points out it is only asking union members for a wage freeze while the council itself took a pay cut.